Study On Risk Control And System Design Of Rural Property Mortgage Financing

The rapid development of the rural economy makes it urgent to promote structural change and industrial upgrading, which leading a strong demand for money. Financing issues are related to rural farmers' income, rural development, and furthermore the healthy development of whole rural economy. With rural property rights system reform, property mortgage financing appears to be of huge significance to solve the problem of rural financing, activating dormant resources and satisfying the financing needs of farmers. In the meantime, some problems have turned up, such as the high risk in the rural property mortgage financing process, the low enthusiastic of finance institutions and the prevalence of underground financing, which bring great challenges to rural mortgage financing. Based on this background, this paper aims to decrease the risk of rural mortgage financing and improve financing motivation of finance institutions by means of system design.Firstly, the paper analyzed the main problems faced by rural property mortgage financing and summarized domestic and international experience. On one hand, it pointed out the significance and necessary of mechanism design through problem analyzing. On the other hand, it summarized the experience of different countries and regions, including Germany, the United States and Japan, which on behalf of developed counties, meanwhile Bangladesh, India and Taiwan of China that represented developing Countries(or regions). Thus it laid the solid foundation for the design of risk control system and pre-subsidy system in the following parts.Secondly, it founded a risk control system based on the core concept of national agricultural cooperative federation(NACF). Through model analysis and case materials, it was proved to be positive to reduce financing risk and thus should be widely supplied in practice.Finally, to motivate finance institutions to reduce the required value of mortgaged property rights, the paper proposed a pre-subsidy system, namely offered financial institutions a certain percentage of the loan amount before the risk. By contrast with the post-subsidy system, the pre-subsidy system seemed to be more effectively in driving financial institutions to reduce the value of the mortgaged property and thus was worthy of being popularized.